China CPI Comes At 4.9%, Below Consensus Of 5.4%, In Line With Zero Hedge "Pervasive Data Manipulation" Expectations

Tyler Durden's picture

The consensus expectation for Chinese CPI was 5.4%. Zero Hedge's expectation based on just announced manipulated CPI data was 4.9%. Guess who was correct... In the meantime, Chinese food prices are not increasing by 5% every ten days, or over 400% annualized. Or at least, they are not doing so on rice (most likely fake) paper.

From Bloomberg:

China’s inflation was less than economists estimated in January after the statistics bureau cut the weighting of food in the consumer-price index.

Consumer prices rose 4.9 percent last month from a year earlier, the statistics bureau said in a statement on its website today. That compared with a 4.6 percent gain in December and the median forecast of 5.4 percent in a Bloomberg News survey of 27 economists. Producer-price inflation accelerated to 6.6 percent from 5.9 percent in December.

A drought in wheat-growing regions, rising global commodity prices and a 53 percent increase in money supply in two years are adding to price pressures in the fastest-growing major economy. Officials may front load policy tightening in the first half of the year as inflation remains elevated, according to economists from JPMorgan Chase & Co. and Morgan Stanley.

“The combination of rising inflationary pressure and robust economic growth makes further tightening inevitable,” Shen Jianguang, a Hong Kong-based economist at Mizuho Securities Asia Ltd., said before today’s release. He expects at least two more interest-rate increases before the end of June.

The Shanghai Composite Index rose 0.4 percent as of 10:15 a.m. local time
Changes to Index

Statistics bureau spokesman Sheng Laiyun said in October that new weightings for the consumer price index would take effect in January. Food previously accounted for a third of the basket of goods that make up the index and was the main driver of inflation last year. Deutsche Bank AG economist Ma Jun said yesterday any slowdown in consumer-price gains may only reflect a reweighting.

January’s inflation data reflects a “more thorough” change in the weightings of the index made every five years, the China Securities Journal reported today, citing an unidentified statists bureau official.

Asian economies, with food costs and inflows of capital driving inflation, may need to raise interest rates further to limit the risk of overheating and prevent a “hard landing,” International Monetary Fund Managing Director Dominique Strauss- Kahn said Feb. 1. India’s benchmark wholesale-price index rose 8.23 percent in January, Indonesia’s inflation is 7 percent and South Korea’s is 4.1 percent according to the latest government data.